Current Affairs of March - 2017

Housing sector

Affordable housing to be given "Infrastructure" status making low cost housing more affordable for consumers. The new status shall bring cheaper finance for builders who currently have to buy at high rates of 24% from banks.

The Real estate investment trusts REIT's shall be listed from this year making investment in real estate more affordable to small and large investors.

One key that could be taken is to bring land and real estate under GST.

Maharashtra Irrigation scheme

Nanaji Deshmukh Krishi Sanjeevani project is being implemented with the assistance of World Bank to drought proof 4000 villages in Vidarbha and Marathwada.

Single largest Petrochemical complex inaugurated at Dahej, Gujarat.

GDP Numbers: Defying expectations

GDP is calculated by two methods expenditure and output. The output method calculates the value of goods and services produced by the industries in 8 different heads. The expenditure methods is calculated by

Income = Private final consumption expenditure + Gross fixed capital formation + Change in stocks + valuables + Government final consumption expenditure + (Exports - Imports). However due to difficulty in calculating the Private final consumption expenditure there are discrepancies. However both these methods should lead to same value.

It is this PFCE component that has seen a sharp decline due to slowdown in sales of goods. Hence people have questioned the data. However it is also possible that the production has continued but the sales were not made by consumers but by dealers. The dealers wanted to get rid of the excess cash and so bought goods from the industries. This led to increase in sales and excise duty. The other reasons can be hoarders of cash spent in huge amounts to get rid of Rs. 500/1000 notes before deadline. The increase in the size of formal economy and festival spending could have led to increase in GDP.

Problems of Pulse cultivators

Pulses are facing a major price shock in the market due to the Government policies:

  1. Private traders are not allowed to stock the pulse in large amounts and so they cannot invest in building ample storage.

  2. Farmers are banned from exporting but full imports are allowed and so they are forced to sell at low prices.

  3. Government MSP is low for pulses compared to wheat and rice and so farmers dont prefer these.

  4. Government procurement is less and so farmers cant sell at MSP and have to sell at very low prices to private traders when the bumper production is seen.

  5. Futures and option trading is banned and so farmers cannot make themselves aware of pricing trends.

Open Acreage Licensing Policy

  1. A revenue sharing model for oil and gas exploration.

  2. Aim is to boost foreign investments in this sector.

  3. Currently oil production meets only 20% of its domestic needs and gas production only 50%. India aims to cut its imports by 10%. India is the World's 3rd largest consumer.

  4. Under OALP, the DG of hydrocarbons shall upload data about the geological characteristics on the National data repository.

  5. After studying this data A company can begin exploration and once it finds oil or gas potential, it submits a bid to the government and the in the auction the company that discovered the block get a small weightage over others others.

  6. The winner of the auction gets a licence to explore and produce for 20 years or a 8 year exploration contract or a 3 year probing (oil and gas) contract.

  7. Government will not micro manage or micro monitor the company

UNDP Human development report 2016

UNDP publishes 2016 report “Human development for everyone”. India is in the middle human development category and is the third ranked among South Asian countries behind only Sri Lanka and Maldives. HDI is calculated as the geometric mean of three indicators like life expectancy, access to knowledge and standard of living.

Fertilizer subsidy and DBT problems

DBT scheme for fertilizer subsidy on urea, phosphate and potassium fertilizers has been modified. The new scheme involves transfer of subsidy directly to the fertilizer company when the sale actually happens at the retail outlet.

The retail store has to install point of sale machines and then when the farmer buys the fertilizer he has to authenticate himself using his Aadhar card. Earlier the subsidy was transferred when the fertilizer would reach the godown.

This new system has the benefit of reducing leakages and making it more targeted and effective. The subsidy shall be disbursed only when the bag is purchased. This makes it less incentivizing for diversion of fertilizers from godowns or trains etc.

The earlier system would give subsidy to the companies when the goods left the factory or reached the godown. So no one bothered to ensure that once the subsidy was paid the fertilizers were actually sold or not.


  1. DBT is most effective when transferred to the farmers and not the companies. The burden of installation of POS at retail counters is borne by Fertilizer companies.

  2. Unpaid subsidy arrears are Rs. 40000 crore. This puts a burden on the companies to find more capital to invest.

  3. Fertilizer sales are concentrated in June - August and October to December and such a rush can put burden on the infrastructure.

  4. Poor network connectivity and failure to authenticate using Aadhar cards can cause more problems.

Marine and Coastal regulation zone notification, 2017

The Aim of the Marine and Coastal regulation zone notification is to protect marine ecology and ecosystems along with the livelihoods of those who depend on it.

Coastal regulation zone rules of 2011 aimed to protect these but were modified to allow for construction of roads and tourism infrastructure in Goa etc. The new rules dilute the norms further by allowing for reclamation of mudflats and mangroves for tourism infrastructure. Such uninhibited expansion or commercialization of coastal lands make the coastal areas more prone to disasters like floods and tsunamis.

The livelihoods of the fishing community too are not protected. The limited benefit is given in these rules by removing the environment clearance for building of fish processing infrastructure. However coastal management committees with representation of fishing community and adequate legislative powers is missing and so their role is ambiguous. Tourism infrastructure though needed should be sustainable and should affect livelihoods of the fishing community.

Start Up India Action Plan

The government created a Fund of Funds for startups managed by SIDBI.This FFS contributes to the Alternative Investment funds that invests in startups by taking equity shares in them.

A credit guarantee fund shall be created to refinance banks giving credit to startups. This shall provide a much needed access to credit for startups like the MSME sector.

Railway News

Railways inaugurated the indigenously built “Medha” rakes for trains.

Also the “Antodaya Express” was launched as a fully unreserved, superfast train with modern amenities.

Solar energy plant with battery storage

For the first time in India , such a plant shall be set up in Andaman and Nicobar and shall reduce the generation of energy by diesel plants by 50%.

South Korean constitutional court impeaches the President over corruption charges.

G20 Summit in Germany this year. G20 countries represented by Finance ministers and Central Bank governors. There are two tracks in G20: A finance track and a non financial track [ Sherpa ].

West Bengal wins the Santosh trophy - 2017 (inter state football) for the 32nd time by beating Goa

Mission Eleven Million

FIFA Under 17 World Cup to be held in India this year. Mission Eleven Million - Launched by the Sports ministry to “make India a sports superpower” and promote spread of sports culture in the college.

National committee for socially and educationally backward classes

National committee for socially and educationally backward classes shall be created. This shall have constitutional state and judicial powers. It shall replace the existing commission for backward classes. The states shall not be able to add or delete names from the backward class list without Parliament’s approval.

Nepal Army confers the title of honorary general of the Army on Indian army chief Bipin Rawat.

Maternity bill

Maternity bill passed by Lok Sabha now provides paid maternity leave for 26 weeks to women workers of the organised sector which account for 4.4% of working women in India.

The bill also mandates that employers having more than 50 workers should have creche facilities. Studies have shown that women tend to work longer after rejoining from maternity. This means that the family shall remain financially stable during a sensitive time.

The child shall get better care during his early years and women shall be freed from their biological compulsions.

However the bill is silent on leaves for women of unorganised sector and on paternity leaves. Thus the focus on women’s rights mean that the bill is reinforcing gender stereotypes that child care is women’s role only.

National Health Policy Draft

  1. It fails to create a Right to Health as Education was made a fundamental right.

  2. It aims to make spending on healthcare to 2.5% of the GDP.

  3. Action plan to eliminate filariasis and kala azar by 2017, leprosy by 2018, measles by 2020 and TB by 2025. Reduce infant mortality rate to 28 by 2019 and maternal mortality rate to 100 by 2020.

  4. Doesn’t answer whether health can be moved from State list to Concurrent list.

  5. National Health Standards Organization shall ensure that standards are set for private and public institutions in healthcare and a tribunal shall deal with grievance redressal.

  6. By keeping the matter of “Health” in the state list, the states shall have decision making power and the center can only frame “model laws” for the states to adapt voluntarily.

National Health Policy Limitations

  1. The WHO Organization recommends 5% of the GDP to be spent on Healthcare by a country.

  2. Without the states support the National health policy shall remain a failure.

Appointments of Judges: Executive v. Judiciary

SC Collegium rejected every clause in the Memorandum of Procedure proposed by the government for appointment of judges to HC and SC. The contentious clause was that the government could reject any name on grounds of “National security”.

The MoP was to be created after consultations between the Chief justice of India and the Government. The Collegium have also not agreed to allow creation of a “permanent secretariat” in the High courts to assist in vetting and suggesting names to the collegium.

The government also wanted a separate bench of the Supreme court who shall not have any members from the collegium to look after complaints against judiciary. This too wasn’t accepted by the Supreme court.

Prevention of Corruption Act

To protect bureaucrats from erroneous decisions of a commercial nature. The decision that cause a loss to state are treated as corruption cases even though most of them are due to the unpredictable nature of economy or honest mistakes.

This leads to investigation from the CBI / CVC and can harm the officer. Therefore he prefers to not take any decision on such matters.

The prevention of corruption Act was framed in 1988 (pre liberalization era and has very limited distinction between corruption and honest mistakes).

State Police Complaints Authority, Maharashtra

State Police complaints authority has been set up in Maharashtra. This makes the state the first in the country to set up such an authority for investigation of police complaints.

The body is headed by a retired high court judge and other members are 2 retired IPS officers and one retired IAS officer. The SPCA hears complaints regarding abuse of power and other charges against police officers above rank of ACP. District level authority hears complaints related to officers below that rank.

The authority has powers of a civil court and can recommend action to the appropriate authorities. The Action taken has to be reported back to it and reasons in writing for not taking action on its reports.

Indus Water Treaty

Pakistan has growing concerns over the dams being built by India on the Indus waters. They fear that such dams shall be used to choke water to agrarian fields in Pakistan.

This shall in turn cause farmer distress and jihadists can add fuel to the fire. India however needs these dams to overcome the power deficit and also to irrigate the fields in J&K. The concerns of Pakistan shouldn’t be a roadblock in this.

The country could however engage with Pakistan and build dams in the higher Himalayas which would solve the water deficit problems of Pakistan and the electricity problems of India. Such a win win situation would need cooperation from both sides.

Electoral Funding Transparency - Finance bill 2017

The finance bill has removed the cap on donations to political parties by companies.

Earlier this cap was 7.5% of the average three year net profit was maintained. Now this is removed and companies are also protected from disclosing the names of the parties to which they have donated. Only the amount of donations is to be disclosed. This means that companies can influence politics too.

Secret donations to parties is not allowed even in advanced countries and is a controversial move of the government as it goes against the promise of electoral transparency.

Mental Health Bill - Key features:

  1. Right to access mental healthcare treatment from government facilities, right to equal and good quality treatment, ease of access to facilities, right to access free medicines and medical records.

  2. A mentally ill person shall have the right to prescribe the ways in which he wishes to be treated and who the nominated representative shall be. This shall be certified by a medical practitioner or registered with the Mental health board.

  3. Administrative bodies at center and state level to maintain a list of establishments, supervise them, make service and quality norms and also train officials, recommend policy to government.

  4. Decriminalise suicides. Shock therapy allowed under anesthesia and prohibited from administering to minors.

  5. Rights based approach makes it mandatory for government to provide universal mental health care.

  6. Lack of trained personnel a problem as 2-5% of the country suffers from mental health issues and trained psychiatrists are only 4500.

Finance Bill 2017 - Criticism:

  1. The non financial provisions have been incorporated in the finance bill. These relate to merging of several tribunals and closing down of several. This move shall reduce the number of tribunals. However such proposals have to be made through ordinary legislations as the Parliament should get time to deliberate on these.

  2. The Finance bill though can be amended by the Rajya Sabha but it is upto the Lok sabha to accept or reject these. Tribunal appointments to can now be made by the government (currently they are made after consultation with the judiciary). This can create a conflict of interest if the tribunal is hearing a case where the government is a party. The tribunal judge can be influenced to give judgment in the Government’s favor.

  3. The tribunal too have got their jurisdiction enlarged but the question arises whether the judges have the domain knowledge needed to solve disputes of the new jurisdiction.

  4. E.g: The Competition tribunal has been dissolved and new cases are to be handled by Companies Tribunal.

  5. However the government has assured that the tribunal appointments shall be made in consultation with the judiciary. This provision shall be included in the Rules that handle implementation of the Act. The tribunals have been reduced as some of them had no work and few had overlapping jurisdictions. Also many tribunals were created for the same matters. E.g: Seven Interstate water dispute tribunals exist for disputes.

Small Hydro electricity

Hydro electricty projects that generate below 25MW are called as small hydro and get taxation benefits and government subsidies. This threshold is being considered to be enhanced to 100MW.

Bharat Stage - III

Sale of BS-III vehicles shall be banned from 1st April 2017 as the Supreme court has disallowed the sale of such cars. The inventory will have to be scrapped or exported. The entire country shall thus move to BS-IV from 1st april.

World Investment Report is published by the UN Conference for Trade and Development.


BEAMS - Budget Estimation Allocation and monitoring system is a real time budget expenditure monitoring system of the Maharashtra Government.

Payments Council of India is a representative body of non banking merchant aggregators like payment gateways, merchant acquirers, card payment infrastructure providers.

Ganga and Yamuna were declared to have rights of a human by the Uttarakhand high court , this means that discharge of pollutants can be illegal.

UP Government's crackdown on Abattoirs

The UP Government has begun cracking down on meat processing units, abattoirs etc that have come up illegally in UP. This move has not only threatened the livelihoods of many but also has impact on the dairy ecosystem in the country.

The relevance of cow and bullocks as farm animals has been diminishing due to the use of mechanization by the farmers. The importance of cow has now been mainly as a milk producer. Even the bullock has lost in importance due to the artificial insemination techniques. Whether all these changes have benefited or harmed the farming community have to be seen. But they have changed the traditional role of the cow to the farmer.

The farmer now views cow as a milk producing animal and so has to rear the most productive breed. This means all the unproductive breeds have to be disposed efficiently. The abattoirs have thus increased in their importance. They have created avenues for the farmer to dispose of the unproductive bovines and thus invest in new productive animals. If this avenue is taken away from the farmers then the entire dairy economy shall feel the negative effects of this.